Obama's Budget Cuts Are Deepest In States Where He Is Unpopular

Thomson ReutersFile photo of delegates celebrating as U.S. President Obama addresses final session of Democratic National Convention in Charlotte

As Washington has tightened its belt in recent years, the budget cuts have sliced most deeply in states where President Obama is unpopular, according to an analysis of federal spending by Reuters.

Between the 2009 and 2013 fiscal years, funding for a wide swath of discretionary grant programs, from Head Start preschool education to anti drug initiatives, fell by an average of 40 per cent in Republican-leaning states like Texas and Mississippi.

By contrast, funding to Democratic-leaning states such as California and politically competitive swing states like Ohio dropped by 25 per cent.

Though Congress sets overall spending levels, the Obama administration determines where much of that money ends up. Lawmakers also have curtailed their ability to direct money to their home states when they adopted a ban on spending in 2011 known as “earmarks.”

That has given administration officials more power to steer money to places that might return the favour with votes, said John Hudak, an expert on federal spending at the centrist Brookings Institution who worked with Reuters on the analysis.

“In the context of the Obama administration, swing states and blue states are doing better than red states,” said Hudak, who uncovered similar spending patterns by previous presidents in his book “Presidential Pork.”

“I would suggest these numbers would tell us there is politicization going on,” he said.

For the analysis, Reuters divided the U.S. into three categories: Republican-leaning “red” states where Obama got less than 45 per cent of the vote in the 2012 election; competitive “purple” states where he won between 45 per cent and 55 per cent of the vote; and Democratic-leaning “blue” states where he won more than 55 per cent of the vote.

Red, purple and blue states have all shouldered steep spending cuts after a 2011 budget deal, the analysis found. But those cuts have not been doled out evenly.

Discretionary grant funding to red states like Mississippi fell by 40 per cent to $US15 billion between fiscal 2009 and fiscal 2013, the most recent year for which reliable figures are available. Purple states like Ohio and North Carolina saw a smaller drop of 27 per cent, to $US19.8 billion, and blue states saw a yet-smaller drop of 22.5 per cent, to $US27.6 billion. (The tally does not include disaster aid handed out after Hurricane Sandy, which went largely to blue states like New Jersey.)

The disparity doesn’t show up in payments like Medicaid that are distributed through pre-set formulas. It also does not appear in Obama’s 2009 recession-fighting Recovery Act.

It only shows up in federal aid that is most directly controlled by the administration: “project grants,” which are doled out on a competitive basis by career civil servants and political appointees.

Of course, many factors other than politics come into play. Some states aren’t good at writing grant proposals – researchers at the University of Nevada Las Vegas, for example, found that poor planning has hurt that state’s ability to compete for federal dollars. A governor from an oil-producing state may be less inclined to pursue green-energy grants.

But the disparity can’t be fully explained by these factors. At Reuters’ request, Hudak ran a statistical analysis of spending over this period, controlling for differences in population, economy, percentage of elderly residents, miles of federal highway and the number of research universities and hospitals.

Red states still came up short. After 2011, the average red state got 15 per cent fewer grants and 1.3 per cent fewer grant dollars than the average swing state. That comes out to roughly 500 grants and $US15 million for an average-sized red state like Tennessee – enough to pay for 115 additional police officers or upgrade a rural airport to handle larger planes.

PLAYING POLITICS

Veterans of both Democratic and Republican administrations say privately that politics often come into play with such grants. Money to help upgrade a train depot may not boost a president’s approval rating in a state where he is deeply unpopular, but it might make a difference in a competitive state like Colorado.

This approach isn’t unique to Obama. Under presidents Bill Clinton and George W. Bush, Hudak found that purple states got about 7.3 per cent more grants and 5.7 per cent more grant dollars than states that were firmly in one camp.

The Obama administration did not explain why Republican-leaning states have borne the steepest budget cuts, and several Democratic lawmakers declined to comment.

“The administration supports allocating federal grants based on objecting criteria that will help protect taxpayer dollars and ensure that lawmakers are responsible and accountable to the American people,” the White House Office of Management and Budget said in a statement to Reuters.

Project grants, which totaled $US74 billion in the fiscal year ending September 2013, help pay for everything from homeless assistance to agricultural research. But they are also a good publicity tool for a president looking to show voters how he’s making a difference in their communities.

As Obama ran for re-election in 2012, administration officials traveled to battleground states to announce good news: $US45 million for a manufacturing research center in Ohio; $US8.2 million for a tech incubator in Gainesville, Florida; $US18 million to extend a rail system in Charlotte, North Carolina. Each generated favourable coverage in local news outlets.

Those announcements were less common in states where Obama had no hope of winning over his Republican rival Mitt Romney.

Ohio, a key battleground state, won 10,232 grants in the fiscal year that ended in September 2012, just before the election – an increase of 21 per cent over fiscal 2009. Ruby-red Texas saw the number of grants it was awarded over that period drop by 37 per cent, to 10,775, according to Reuters figures.

In dollar terms, according to Reuters data, the difference was just as dramatic. Grant money for Texas dropped 43 per cent, to $US4.0 billion, over that time period. Dollars to Ohio declined 16.5 per cent, to $US2.0 billion.

EARMARK NOSTALGIA

The big problem for lawmakers? They lost their ability to influence the flow of that money. Before the earmark ban, states with elected officials who oversee spending on the Senate Appropriations Committee got about 7.6 per cent more grant dollars than other states, Hudak found. After the 2011 earmark ban, evidence of clout disappeared.

Republican Representative John Culberson used to insert earmarks into spending bills to steer medical research and other projects to his Houston-area district. Since the ban took effect, he says he’s had trouble getting the administration to pay for border control, harbour dredging and even send aid to mop up after a chemical plant explosion.

“The Obama administration approaches the federal government the same way the Chicago machine politicians approach the Chicago public treasury: it’s to be used for their own benefit,” he said.

Some Republicans worry they have handed too much control to the administration. But Congress, under the watch of Republican House Speaker John Boehner, isn’t likely to lift the earmark ban any time soon.

“Speaker Boehner is proud of the reforms we have put in place,” spokesman Michael Steel said, “and believes more should be done to ensure that Washington makes responsible decisions about taxpayers’ money.”